George Pegios v Simon Rez [2022] NSWSC 837

Supreme Court New South Wales

Medium Neutral Citation: George Pegios v Simon Rez [2022] NSWSC 837 Hearing dates: 21 June 2022 Decision date: 23 June 2022 Jurisdiction: Equity Before: Hammerschlag CJ in Eq Decision: Proceedings dismissed Catchwords: CONTRACT – Claim by the plaintiff that he lent $170,000 to the first defendant for a period of two years at an interest rate of 5% per annum pursuant to an oral agreement – the first defendant denies the loan – reliance on spoken words to establish cause of action – conversation must be proved to reasonable satisfaction of the Court – HELD – Loan not proved Cases Cited: Briginshaw v Briginshaw (1938) 60 CLR 336 Helton v Allen (1940) 63 CLR 691 Rejfek v McElroy (1965) 112 CLR 517 Sergei Sergienko v AXL Financial Pty Limited [2021] NSWSC 297 Watson v Foxman (1995) 49 NSWLR 315 Category: Principal judgment Parties: George Pegios - Plaintiff Simon Rez - First Defendant Reka Consultants Pty Limited - Second Defendant Representation: Counsel: P Doyle Gray - Plaintiff J Young, A Lim - Defendants

Solicitors: First Choice Legal - Plaintiff Swaab - Defendants File Number(s): 2020/173791

JUDGMENT

introduction 1. HIS HONOUR: The determinative question in this case is: did the plaintiff (to whom I will refer as George) lend the first defendant (to whom I shall refer as Simon) $170,000 in 2017? 2. First names are used with no disrespect intended. 3. The answer to the question turns on whether George is to be believed with respect to a conversation which he says he had with Simon "in or around June 2017, and after 11 June 2017", when Simon asked for a loan, which George says he then made. 4. Simon denies this conversation. He says that there was no loan, but that George asked him to help hide money from his (George's) estranged wife Mariana Arambasic (Mariana), and that $120,000 was paid over to Simon's company (the second defendant, Reka) and repaid to Simon in cash over time by way of five payments. Simon says that another $50,000 was given to him by George as a gift. George denies this. 5. George sues for repayment of the alleged loan, together with interest. 6. George bears the onus of establishing the loan. He asserts no other form of transaction or entitlement to payment. 7. The parties' respective positions are irreconcilable. There is no room on George's case for a finding of liability (in whole or in part) on Simon on any basis other than non-repayment of the loan. By the same token, in Simon's case, no question of repayment of a loan can arise, and he bears no onus to establish the existence of the alleged gift, although, if he does, it is destructive of George's case. 8. I am unpersuaded that George made the loan. 9. Far from feeling an actual persuasion that the conversation relied on by George took place, I consider that it is more probable than not that there was no loan, but that there was an arrangement under which Simon would "warehouse" money for George to hide it from Mariana. In my opinion: 1. George is not a trustworthy witness, 2. the contemporaneous objective circumstances such as they are, and the parties' subsequent behaviour, favour Simon's position rather than George's, 3. there is corroboration for Simon in the evidence of a witness who was not cross-examined, and 4. critically, Simon was only perfunctorily cross-examined and none of his evidence, including of the disputed conversations, was challenged. 1. In his statement of claim, George alleged that monies were lent either to Simon personally, or to Reka, or to both jointly. In argument, contentions that the borrower was Reka, or that it was joint, were abandoned. It followed that the proceedings against Reka fell to be dismissed without more. George's final position was that the loan was to Simon personally and the monies were paid to Reka at his direction.